The Casey’s board of directors is recommending that shareholders turn down the latest takeover offer from a Canadian company while saying they are talking with a third party about a bid to buy the company. Casey’s chief financial officer Bill Walljasper talked about the Couche-Tard offer of $38.50 a share today during a conference call on the company’s quarterly earnings.

Walljasper says the Casey’s board thoroughly reviewed the offered and unanimously recommended that shareholders not take the offer as the board said it “substantially undervalues Casey’s and is not in the best interest of Casey’s its shareholders, and other constituents.”

Walljasper says the Ankeny-based company has received a preliminary proposal from a third party to purchase Casey’s at $40 a share in cash — and they are talking it over.

“The board reviewed the proposal and unanimously determined that it substantially undervalues Casey’s,” Walljasper says, “While the Board firmly believes that Casey’s value substantially exceeds $40 per share, it has authorized discussions with the third party to explore whether a transaction can be reached that reflects Casey’s true value and is in the best interests of Casey’s, its shareholders and other constituencies.

There can be no assurances that a transaction will be reached and the company is under no legal obligation to provide an update on the discussions with the third party.” Walljasper says the effort to fight the takeover from Couche-Tard had an impact on earnings in the first quarter. He says the company had a “solid” first quarter with earnings of 73-cents a share compared to the record quarter one year ago of 87-cents.

Walljasper says the company had $6.2-million in costs related to the Couche-Tard takeover attempt, and without those costs, the earning would have been 83-cents a share. Walljasper says a one-time tax benefit of just over two million dollars also helped them reach the record last year. As for this quarter, the convenience store chain has been profiting from gas sales.

Walljasper says in all three months of the quarter they saw a gas margin significantly above their goal of 13.5 cents, so their overall gas margin was 16.4-cents a gallon. He says the average price of a gallon of gas was $2.61 a gallon, compared to $2.35 a gallon a year ago, but gas sales were up one-point-five percent.

Walljasper says in-store sales were affected by the economy as customers continue to be “price conscious,” and the company is launching some “value-oriented” promotions to drive sales.

Casey’s sent a letter to shareholders regarding the two offers to buy the company. See the info here: www.supportcaseys.com.